Correlation Between China Mobile and Biwin Storage
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By analyzing existing cross correlation between China Mobile Limited and Biwin Storage Technology, you can compare the effects of market volatilities on China Mobile and Biwin Storage and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in China Mobile with a short position of Biwin Storage. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Mobile and Biwin Storage.
Diversification Opportunities for China Mobile and Biwin Storage
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between China and Biwin is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding China Mobile Limited and Biwin Storage Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Biwin Storage Technology and China Mobile is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on China Mobile Limited are associated (or correlated) with Biwin Storage. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Biwin Storage Technology has no effect on the direction of China Mobile i.e., China Mobile and Biwin Storage go up and down completely randomly.
Pair Corralation between China Mobile and Biwin Storage
Assuming the 90 days trading horizon China Mobile Limited is expected to under-perform the Biwin Storage. But the stock apears to be less risky and, when comparing its historical volatility, China Mobile Limited is 3.06 times less risky than Biwin Storage. The stock trades about -0.14 of its potential returns per unit of risk. The Biwin Storage Technology is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 5,697 in Biwin Storage Technology on November 7, 2024 and sell it today you would earn a total of 602.00 from holding Biwin Storage Technology or generate 10.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
China Mobile Limited vs. Biwin Storage Technology
Performance |
| Timeline |
| China Mobile Limited |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Modest
| Biwin Storage Technology |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
China Mobile and Biwin Storage Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Mobile and Biwin Storage
The main advantage of trading using opposite China Mobile and Biwin Storage positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Mobile position performs unexpectedly, Biwin Storage can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Biwin Storage will offset losses from the drop in Biwin Storage's long position.The idea behind China Mobile Limited and Biwin Storage Technology pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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